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China's Local Political Budget Cycles

Authors


  • The author would like to thank the four anonymous reviewers and the editor of AJPS and Professors Yu-Shan Wu, Yi-feng Tao, S. Philip Hsu, and Szu-chien Hsu for helpful comments. Any remaining errors are the author's own. The author acknowledges financial support from the Chiang Ching-Kuo Foundation for International Scholarly Exchange (USA).

Gang Guo is Croft Associate Professor of Political Science and International Studies, The University of Mississippi, 128 Deupree Hall, University, MS 38677-1848 (gg@olemiss.edu).

Abstract

This article examines the political budget cycles in Chinese counties. The shift to a more performance-based cadre evaluation and mobility system during the reform era has created an incentive structure for local leaders to increase government spending at strategically important time points during their tenure to enhance the prospect of official promotion. Such expenditures help local leaders to impress their superiors with economic and political achievements, especially those visible and quantifiable large-scale development projects. At the same time, economic and fiscal decentralization increased the capacity of local leaders to influence government budget expenditures as the need rises. The hypothesized curvilinear relationship between a leader's time in office and increased spending was tested using a comprehensive data set of all Chinese counties from 1997 through 2002. The panel data analysis shows that growth in local government spending per capita is the fastest during a leader's third and fourth years in office.

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